Format and content of CAFR- Comprehensive Annual Financial Report Flashcards
Government WIDE Financial Statements (2 statements)
- statement of net position
- statement of activities
Includes two statements:
- The statement of net position: includes a government wide balance sheet, its on the accrual basis, and it has two separate columns.
- It has governmental activities AND business activities
- it does NOT include fiduciary funds
- net position is the last line on this statement - The statement of activities: this includes a government wide statement of operations. Its prepared on the accrual basis as well. The sections include:
- the program expenses, the program revenues, net program expense or revenue, then general revenues
- Governmental activities and business type activities are separated on the statement
- It does not include fiduciary funds. Remember that fiduciary funds are funds being held in a custodial capacity, so they aren’t resources for the governments use, so they are not included on the government wide financial statements
The measurement focus for the government wide financial statements is …
the economic resources focus
the government wide statements are accrued on the accrual basis
which reflects the economic sources measurement focus
Governmental Fund Financial Statements
They include a balance sheet and then a statement of revenues, expenditures, and changes in fund balance
Governmental Fund Statements DO NOT include a statement of cash flows
Budget Comparison for Government Funds
Budget-to-actual is REQUIRED for the required for the General Fund, and any annually budged major special revenue fund.
The GENERAL FUND IS A REQUIRED FUND. It uses modified accrual accounting and uses budgetary and encumbrance accounting.
-Revenues come from taxes, licenses and permits, charges for services, fine. Remember that revenue but be MEASUREABLE and AVAILABLE.
- property tax revenues are recorded after they are levied at the estimated collectable amount.
- Expenditures are salaries, operating expenses, capital outlays for buildings & improvements, debt service such as principal & interest payments.
Special Revenue Funds-committed to a specific purpose
These are for revenue sources that are committed to a specific purpose other than debt service or a capital project.
- used modified accrual accounting
- and also use budget and encumbrance accounting
Debt Service Funds- used to pay long term debt
are for resources used to pay interest and payable on general long-term debt.
- the life of the fund is ties to the underlying debt
- also use modified accrual accounting basis of accounting
Capital Projects Funds-used for buildings, land or improvements
used for resources that are restricted for capital outlay for buildings, land, or improvements
-also use the modified accrual basis of accounting
Permanent Funds-used for the benefit of the government or its citizens
are resources held in trust by the government for the benefit of the government or its citizens
- the principal is required to remain intact
- earnings are transferred to the general fund or to a special revenue fund
Proprietary Funds Financial Statements
The required statements are…
- statement of net position
- statement of revenues, expenses, and changes in net position
- statement of cash flows
organized in order by:
- operating revenues
- operating expenses
- operating income or loss
- non-operating revenues and expenses
- ends with “change in net position”
*equipment purchases to be used with a proprietary fund will be depreciated over it’s useful life just like in a for-profit business. The proprietary funds used in accrual accounting just like a for-profit entity.
Fiduciary Funds Financial Statements
The required statements are:
1. statements of fiduciary net positions:
assets
\+deferred outflows of resources
less: liabilities
less: deferred inflow of resources
ends with: net position
2.statements of changes in fiduciary net positions
additions
less: deductions
ends with: net increase or decrease in fiduciary net position
- Fiduciary Fund statements include a separate column for each fund type.
- Remember that fiduciary funds are NEVER major funds.
Notes to Government Financial Statements
are similar to the notes for a for-profit business financial statement in that disclosures are required for items that require disclosures or more additional explanation
The main segment is the summary of significant accounting policies, which would include a governments policies for things like capital assets, pension plans, debt service schedule, long term liabilities, major projects, etc.
Managements Discussion & Analysis section
The MD&A section in the comprehensive annual financial report discusses the current years results compared to prior years.
It provides an explanation of the included financial statements and how the different statements relate to each other.
-it will also discuss overall financial position, reasons for any major changes in fund balances, deviations from the budget, etc.
Budgetary Comparison Reporting
Every Comprehensive annual financial report should include a budget to actual comparison statement.
-Adherence to the budget is extremely important to government stakeholders, and key decisions driven by management.
Financial reporting entity, blended & discrete units
On the exam, you might see questions on the “financial reporting entity” , which means determining a primary government and its component units.
- A component unit is a legally separate organization that the primary government officials are financially accountable for
- once the component units have been identified, there are two ways to which the component units are reported…
1. Blended: if the component unit is part of the primary government in substance, then the balances for its funds are included with similar funds in the primary government, hence “blended”
2.Discretely: for all other components, a separate column is added to the right of the primary governments data. This is discrete presentation.
